Will My Mom Be Okay in Retirement?

Summary

Podcast Summary: "Will My Mom Be Okay in Retirement?"

Podcast Information:

• Title: Will My Mom Be Okay in Retirement?
• Podcast: Jill on Money with Jill Schlesinger
• Host: Jill Schlesinger, CFP®
• Release Date: May 20, 2025

---

Introduction

In this episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger and co-host Mark delve into a listener's concern about her mother's readiness for retirement. The discussion provides a comprehensive analysis of the mother's financial standing, explores strategic advice for retirement planning, and underscores the importance of thoughtful financial management to ensure a comfortable and independent retirement.

---

Listener's Story: Lillian's Concern for Her Mother's Retirement

Guest: Lillian, a 24-year-old graduate student from Berkeley, California, joins the show to seek advice about her mother's impending retirement.

Background:

• Lillian's Situation: Currently supporting herself while attending grad school.
• Mother's Profile:
  • Age: 65, planning to retire at 70.
  • Income: $140,000 annually from her current job.
  • Assets:
    • 401(k): $200,000
    • Brokerage Account: $200,000 (recently started)
    • Cash Reserves: $50,000
  • Home Ownership: Owns a home in San Diego, purchased in 2010 for approximately $450,000, now valued around $800,000 with an outstanding mortgage of $180,000 at a 3.7% interest rate.
  • Additional Responsibility: Caring for Lillian's 95-year-old grandmother, recently transitioned to Medicaid for health coverage.

---

Financial Analysis

Income and Savings:

• Current Income: Mother's annual income stands at $140,000 from her job.
• Retirement Savings:
  • 401(k): $200,000
  • Brokerage Account: $200,000
  • Total Savings: $400,000
• Savings Rate: High savings rate achieved by living with an aunt for five years, allowing substantial capital accumulation.

Assets and Liabilities:

• Home Equity: Significant appreciation in property value enhances net worth.
• Mortgage: Remaining balance of $180,000 with a favorable interest rate.

Expenses and Dependents:

• Monthly Expenses: Approximately $5,000, primarily driven by mortgage payments and grandmother's care.
• Additional Costs: Recent medical expenses due to grandmother's hospitalization.

---

Expert Advice: Assessing Retirement Readiness

Income Streams in Retirement:

• Social Security: Expected to receive $3,900 monthly upon claiming at age 70.
• Employment: Plans to continue working until 70, enhancing financial security and deferring Social Security for increased benefits.

Investment Strategy:

• Current Allocation: Mother’s 401(k) and brokerage accounts are aggressively invested.
• Recommended Adjustment: Shift to a more balanced investment approach (e.g., 60% equities, 40% bonds) to reduce risk as retirement approaches. Mark Quincy advises, “a 60, 40 allocation would be appropriate given her age and timeline” (16:45).

Managing Expenses and Supporting Family:

• Mortgage Strategy: Advise against paying down the low-interest mortgage early to retain liquidity for retirement needs.
• Additional Contributions: Encourage maximizing 401(k) contributions and investing in brokerage accounts instead of reducing mortgage payments, ensuring ample funds are available during retirement.

Caregiving Considerations:

• Grandmother’s Support: Transitioning grandmother’s health coverage to Medicaid alleviates some financial strain.

---

Key Takeaways and Conclusion

• Financial Health: Lillian's mother is in a strong financial position with substantial savings and manageable debt, despite a later start in retirement planning.
• Investment Adjustments: Transitioning to a less aggressive investment portfolio will help safeguard assets as retirement nears.
• Income Stability: Continued employment and deferred Social Security benefits will provide a robust income stream during retirement.
• Family Support: While the mother currently supports her grandmother, Medicaid coverage reduces long-term financial obligations.
• Emotional Well-being: Maintaining employment supports both financial stability and personal fulfillment, contributing to overall well-being in retirement.

Final Insights: Mark Quincy emphasizes the importance of enjoying work if possible, as it enhances financial confidence and independence in retirement. He commends Lillian’s mother for her disciplined savings and strategic planning, highlighting the positive outcomes of proactive financial management.

---

Notable Quotes

• Mark Quincy: “The key is to listen to what is not said.” (03:56)
• Mark Quincy: “If she enjoys what she does, the longer she works, the better this all looks.” (11:35)
• Mark Quincy: “It’s amazing what she’s done in just a handful of years.” (15:46)
• Lillian: “It's funny. I was preparing for this episode, and I was surprised by how high these numbers were.” (12:50)

---

Conclusion

This episode provides a reassuring narrative for listeners concerned about retirement planning, illustrating how disciplined savings, strategic investment adjustments, and continued employment can collectively ensure a secure and fulfilling retirement. Lillian's story serves as an inspiring example of effective financial planning, highlighting the significant impact of proactive and informed financial decisions.

For personalized financial advice or to share your own story, visit jillonmoney.com and click the "Contact Us" button.

Transcript

[Jill Schlesinger]

Hey gang. Summer is just around the corner and May is packed with so many reasons to celebrate. Maybe it's a graduation barbecue or you're soaking up some sun by the pool or a long weekend with family and friends. No matter what you are celebrating, Whole Foods Market makes it easy to kick off the season with great everyday prices on high quality favorites. I'm so lucky because I have a Whole Foods that is essentially in between my workplace and my home. And I love how easy Whole Foods Market makes it to pull together a last minute gathering. I was recently there and those yellow low price signs are no joke. I was able to pick up the no antibiotics ever boneless skinless chicken breasts which I pop on the grill, get a little sauce and I am off and running. And you can do the same save on May celebrations with great everyday prices at Whole Foods Market. It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover, you can get this. Discover automatically matches all the cash back you've earned at the end of your first year.

[Mark]

Seriously, all of it.

[Jill Schlesinger]

And we trust you to make smart decisions. After all, you listen to this show see [e-mail] credit card.

[Mark]

Welcome to the Jill on Money Show. It's Tuesday, May 20th and we are here answering your financial questions. And sometimes they're not as simple as you frame them. Sometimes they actually cover up something much more complicated going on in your life. And so I know sometimes you'd like, oh, I'm just gonna send you an email. But one of the reasons we love having you on the air live is that we can ask a lot of follow up questions. And I was just recently with a wonderful group of female financial advisors and I was, I said to them there was sort of like, how could you possibly do a financial plan? These are like super smart, crazy, brilliant people. And like, how could you do like financial planning in 15 or 20 minutes with somebody on the air? I said, well, the key is to listen to what is not said. And sometimes you guys will come on the air and you'll say one thing and then we go a little bit deeper and there's another situation that is underneath it. And so one of the reasons I think it's so great to come on the program with us and talk it through. And one of the reasons I think financial advisors who are fiduciaries are so valuable is that they are really very well positioned and hopefully I'm still well positioned after doing this for a long time to uncover the unsaid part of your question and to try to help you figure out what is it that you're really trying to solve for. So if that feels like something that you could get into, just go to our website, jillonmoney.com, click the contact us button, write us the note, and if you want to come on the air, check the box. Mark will do everything else while you're on the website. You'll see we've got all sorts of content that lives there. You can buy my books. You can subscribe to Jill on Money.

[Jill Schlesinger]

Live, 45 bucks to be part of.

[Mark]

4 live webinars for the next 12 months. Our next one's coming up. Mike Quincy from Consumer Reports going to talk cars and trucks, Thursday, June 5th. And you also get all the back catalog of our webinars and bonus audio and video content, everything there at Jill On. And yeah, there's a bunch of free stuff, too, but you know, I'm trying to shake the trees a little bit today. All right, let's get to you. Enough about us. We are talking to Lillian, who joins us from Berkeley, California. Hello, Lillian. How are you?

[Lillian]

Hi. I'm happy to be here.

[Mark]

Oh, excellent. What's going on? How can we help you out today?

[Lillian]

So I've just started listening to your podcast, which might be a little strange because I'm 24 and retirement is not necessarily upcoming for me.

[Mark]

Dude, we do everything. It's not just retirement. Just know that we do it all and we love our young listeners. You're not alone.

[Jill Schlesinger]

You're not alone.

[Lillian]

Well, yay. Glad to hear it.

[Mark]

Good.

[Lillian]

But retirement is upcoming for my mom. She is a little bit later to the saving for retirement game. I think she started about five years ago and just trying to get into personal finance, like when it seems like everyone's already ahead of you and you're trying to retire in the next 10 years has been kind of overwhelming for her. So I've been trying to help out a little bit, but I also don't know that much. So I'd love to just chat with you and see is it possible for her to retire in the next few years? What kinds of steps should we be taking?

[Mark]

Okay, that makes sense. And so let me just ask a little bit about you. So you're 24. Are you living home or are you living on your own? Right now?

[Lillian]

I'm living on my own. I'm in grad school at Berkeley.

[Mark]

Oh, I hope you're studying something that's going to make you a lot of money. I hope maybe.

[Lillian]

I hope so too.

[Mark]

Let's talk about mom for a moment. So are you self sufficient right now?

[Lillian]

I am, yes.

[Mark]

Okay, great. Okay. So how old is your mom?

[Lillian]

She's 65. She's about to be 65.

[Mark]

And are you the only child or are there others?

[Lillian]

I am, yes. It's just us, me and her.

[Mark]

Aw, love that. So you're a team, which is great. What is she doing right now for income? She's working right now.

[Lillian]

She's working? Yeah.

[Mark]

How much does she earn?

[Lillian]

140K a year.

[Mark]

Wow, that's a lot.

[Lillian]

Yeah, she just got a new job that she loves.

[Mark]

Fantastic. So she wants to. She started five years ago, she's 65 now and she wants to work for how much longer?

[Lillian]

So I think, I mean, if it were up to her, I think she'd be done tomorrow, but I think she's decided that she's probably gonna work until she's 70.

[Mark]

Okay.

[Mark Quincy]

But she loves it.

[Mark]

I know. That's so good. I mean, why stop if you're loving it? And she only. She got a late start, so she probably got a lot of energy. She's not like us, beaten down and exhausted. How much has she saved? This is really the critical question. You said she got a late start. So does she have a 401K or a 403B? What does she have?

[Lillian]

She does. She has a 401K with about $200,000 in it.

[Mark]

Wow. Oh my God. Okay. In five years. That's pretty good.

[Lillian]

No, it's amazing. Yeah.

[Mark]

What else does she have? She have money in the bank?

[Lillian]

She has a brokerage account that she just started with about $200,000 in it.

[Mark]

How could me. What just started. How did she get all this money? This is incredible.

[Lillian]

Well, so for the past five years she was living with my aunt and saving a lot of money. Basically all of her money she was just putting right into the bank.

[Mark]

Okay. And does she rent now or does she own her own home?

[Lillian]

She owns her own home.

[Mark]

How much is the house worth?

[Lillian]

So the house is worth. I guess that's a good question. She lives in San Diego and property values have really exploded since she bought.

[Mark]

Okay.

[Lillian]

But the mortgage has $180,000 left on it.

[Mark]

Okay. Do you know the interest rate on the mortgage?

[Lillian]

Yeah, 3.7.

[Mark]

Okay. Do you remember what she like when. I can almost guess what the value is if you tell me when she bought it and for how much?

[Lillian]

Yeah, she bought it in, I think 2010 for about 450 oh, my God.

[Mark]

I mean, I'm gonna guess it's probably worth eight, is my guess.

[Lillian]

I think that's. I think houses in the neighborhood that are similar have been going from eight to a million.

[Mark]

Okay, so. But she likes it. She wants to stay there, right?

[Lillian]

Yes.

[Mark]

Okay. And you're okay with her staying there? Like, she's going to be. She has a community and she's alone, but she's okay, right?

[Lillian]

Absolutely. She's got. I mean, my. My family's there. Like.

[Mark]

Okay.

[Lillian]

She's. She's good.

[Mark]

Okay, so the 200 grand in a 401k, 200 grand in brokerage. The house, does she have, like, a bank account that she has money in?

[Lillian]

Yeah, she has about $50,000 just in cash.

[Mark]

Is that it? For the assets? Is there anything weird hanging around, like. Okay, okay. And what about the amount of money she spends? Do you know what it costs her to live her life?

[Lillian]

Yes. So this is a little. Because her main, like, fixed expense is the mortgage.

[Mark]

Yes.

[Lillian]

And basically I talked to her a little about her monthly budget, and it seems like her. Her take home is about $7,000 a month.

[Mark]

Okay.

[Lillian]

Her budget is anywhere from four to six. And then the rest of it she puts. Recently, the rest of it she's been putting on the house.

[Mark]

No.

[Lillian]

Okay, I'll tell her. No, no.

[Mark]

Okay, wait a second. So. So definitely do not pay down that mortgage. We need her money. Okay. And so just to explain. Lillian's mom, if you're going to listen to this, the reason not to pay down the mortgage is we want to try to have you actually accumulate money that you can use, because if we pay off that 3.7% mortgage, we can't exactly take, like, 90. Your living room into the grocery store in 20 years. Right. So we don't want to pay down that cheap fixed mortgage. Just let it be. Continue to pay. So if her take home is seven grand and she's got four, what do you think the VAR. I mean, a $2,000 variance, what do you think that's about? Do you think that that's, like, what's. Cause that's. I mean, only because she's. At a certain point in your life, you would kind of know what your expense is at. Because she travels a lot. Like, what else is going on?

[Lillian]

So she. This is. I think that one of the bigger things is my grandmother is living with her. My grandmother's 95, and that is a lot of expense. I mean, she just came out of the hospital.

[Mark]

She, like, okay, okay.

[Lillian]

There's. Yeah.

[Mark]

Okay, so your grandma lives with her, and your mom is primarily responsible for that. There's a lot of, like, female powerful energy here. I'm liking it. It's good. And I presume Grandma has Social Security, but not much more than that, right?

[Lillian]

Yes. She. We recently got her on Medicare, or she's been on Medicare, but now we got her on Medicaid. So a lot of her health insurance has just become covered.

[Mark]

Oh, thank goodness. That's good.

[Lillian]

Yeah.

[Mark]

Okay, so your mom has health insurance through her work, right?

[Lillian]

Yes.

[Mark]

Okay. And so when she turns 65, she still has to say, hey, I'm signing up for Medicare. I'm not taking my benefits yet. That's important.

[Lillian]

Okay.

[Mark]

The next part of this is how much is she entitled to in Social Security when she turns 70?

[Lillian]

Yes. So I have the breakdown right here. It seems like at 70, she'll get $3,900 a month.

[Mark]

Perfect. That's great. That's a good chunk of money, right?

[Lillian]

Yeah.

[Mark]

And the money that's in the 401k, I presume that that is a traditional 401k, meaning she's earning 140 in that. Okay. So that's all traditional. The brokerage account, the bank. Okay. I'm feeling pretty good about this. I mean.

[Lillian]

Oh, that's great.

[Mark Quincy]

Is she contributing to the 401k actively? Do you know?

[Lillian]

Yes. Yeah.

[Mark]

Do you know how much she's putting in?

[Lillian]

That's a good question. I don't have the info in front of me, but she assures me that she maxes out the employer match.

[Mark]

Okay. At least the employer match. Okay, that's good. Mark, how do you think Lillian. Lillian's mom is doing? I mean, especially because I think that her expenses are. Let's just presume her expenses are five grand a month. You know, your grandmother may have reduced the actual need, but let's just say it's five grand a month, generally speaking. So at five grand a month, Mark, how do you think Lillian. Lillian's mom is looking at age 70 in five years, knowing that she'll have five grand a month of need expenses?

[Mark Quincy]

Yeah. In five years. At 70, there's no issue. There's.

[Mark]

I don't know.

[Mark Quincy]

She's got 400,000 that's going to grow. She's contributing whatever she's contributing to it. So that's going to keep growing for five years. Social Security is going to kick in. There's really no problem.

[Mark]

I don't think that there should be a big problem. But what I want to just remind you Lillian. And your mother is that if she enjoys what she does, the longer she works, the better this all looks. And what do I mean by that? Okay, so she can claim her Social Security benefit at age 70 and keep working so she can get that money. She might. Every. But every. Even if she said, I love my job, maybe she could talk to her boss. I could do it part time. I mean, if they love her and she loves it, then making that money is going to build up her confidence, and I think that would be really interesting and potentially important for her. So I think that she's done a great job. I mean, she's really done a fantastic job of cranking it up. It just shows you, right, that you can do a lot if you are motivated to do so. Now, are you worried about it, Lillian? Are you feeling okay?

[Lillian]

It's so funny. I was preparing for this episode, and I was surprised by how high these numbers were, because I think I was a little stuck in five years ago when. And she had $30,000 in the bank, and that was it.

[Mark]

Unbelievable, right?

[Lillian]

Right. It's amazing. I'm incredibly proud of her.

[Mark]

Mark's clapping.

[Lillian]

Yeah. So I think I feel a lot better now, but I still. I still like my. When I think about my life going forward and, like, wanting to. Do you feel like her. She might be. She would be, like, independent in retirement. Like, would she need contributions from me in any way?

[Mark]

No, I don't think she's gonna need your help. But if. Is she freaked out about that? Is that, like, one of the. Is it. In other words, I have to try to figure out, like, is there something going on underneath here that's like, oh, my God. My mother would never want to rely on me because my grandmother relied on her. And that would be like, you know, I don't want to repeat that cycle. Is that kind of where we are in the life cycle of the Lillian female, powerful women family?

[Lillian]

I mean, I think that it's not her favorite idea that she would have to rely on me, but I think, like, I mean, over the years, because, you know, for a long time, we were not in this situation, and so I feel like she had kind of accepted it, but it's. I think she's gonna be thrilled.

[Mark]

I think she should be thrilled, and I think you should be proud of her, and she should be proud of herself.

[Lillian]

Yeah.

[Mark]

If you want to really kind of. If you want to, like, lower the temperature a little bit, one way to do that is to say to her, don't rush to pay off the Mortgage. Right. You can use that money because we want. Again, one of the reasons I like having the money available in a brokerage or the 401k is that she will need to pull the money out of these accounts to help supplement her Social Security.

[Lillian]

She just.

[Mark]

She's going to need it.

[Mark Quincy]

Instead of putting any extra money towards the mortgage, I would increase the contributions at work.

[Mark]

Yeah, it might be easier to do that either. Either do the workplace 401k or throw the money in the brokerage. Saves, like whatever. She. Let's just say she's like, you know, every couple of months I put a thousand bucks down on the mortgage. Don't do that. Take the money and say, I'll put an extra 500 bucks a month in my 401k or my brokerage account. Like, put it, use it that way. And you know, not to be crass, but obviously your mom is not going to be paying for your grandmother's expenses forever.

[Lillian]

No.

[Mark]

She'S going to be in a great place, living in a place she likes. Again, if she wants to feel that sense of independence, the best way to feel that is to keep working. If you told me she hated her job, that would be one thing. Like, oh, my God, I hate this so much. It's the worst thing ever. Then we'd figure it out. But again, even if she can just work part time in the next. In those 70, 70, like basically like 70 to 73. Just have a little cash flow come in. It'd be really nice for her to be able to beef up her savings in that way. But otherwise she's in very good shape and you guys have done a great job.

[Lillian]

That's so wonderful.

[Mark Quincy]

It's amazing. It's amazing what she's done in just a handful of years.

[Mark]

It's incredible. Lillian, what about for you, 24 years old are you going to have. Do you have any college debt?

[Lillian]

I have a little, little bit of college debt. But right now the interest is deferred because I'm in grad school. So I plan to just knock that out once I'm.

[Mark]

Yes, baby, I want you to knock that out. Is there anything else that we can help you out with today?

[Lillian]

I have one small question. My mom's 401k and brokerage accounts are very aggressively invested because.

[Mark]

Okay, tell her to calm down on that. Tell her to pull that.

[Lillian]

I've been thinking about that also.

[Mark]

Yeah, I mean, I would say the mark. What do you think is the most aggressive Lillian's mom should be in terms of aggressive? Moderately Aggressive growth, balanced. I mean, she is gonna work for five more years. I'm sort of thinking 70, 30 would.

[Jill Schlesinger]

Be about the most risk.

[Mark]

But, yeah, I was even thinking, like, 60, 40.

[Mark Quincy]

Yeah, 60, 40. Just given her age and the timeline.

[Mark]

You see, the thing, Lillian, is that we know that in five, if she decides not to work, we will need to pull money out of these accounts. Yeah, right. We know we're gonna have to do that. So it does argue to be a little bit less aggressive. And she's gone through this tumultuous period, and as we speak to you, things have gone. Bounced back from the lows in a pretty decent way. Now may be a good time to do that. Okay.

[Lillian]

Okay.

[Mark]

Good.

[Lillian]

Perfect. Thank you so much.

[Mark]

I love it. Female empowerment. It's all what we're about, man. God bless Lillian's mom, Mark. It's incredible.

[Mark Quincy]

Yeah, it's a great story.

[Mark]

It's a great story. Great story. If you are worried about your mom, if you're worried about your adult children, if you're worried about yourself, just go to jillonmoney.com, click the contact us button, write us a note. Come on the air. We'll talk through whatever's going on. Don't forget while you're on the website to sign up for the free weekly newsletter.

[Jill Schlesinger]

It is a great way to keep.

[Mark]

Up with the stories you may have missed during the week. You can subscribe to us on the Odysee app or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. And we always ask you to please put your hands, metaphorically, on someone's back. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow. Buying a home in California can certainly feel intimidating.

[Jill Schlesinger]

We hear from listeners all the time throughout the state, and they want to know, where can they even start? Many of them find that turning to a Realtor changed everything. Realtors can help buyers understand what they can afford. They can explain all of the steps that are involved in purchasing a home. And they can walk you through every detail, from making an offer to closing the deal we're working with, a realtor can help you feel less alone or unsure about the process. And that peace of mind that is the power of having a realtor by your side. Whether you're ready to move or just starting to dream, don't go it alone. Don't let what you don't know stop you from starting your next chapter. Find your [e-mail] that's championsofhome.com hey gang, I was a small business owner.

[Mark]

I know how hard it is and.

[Jill Schlesinger]

Starting your business should actually be simple. Now you can get more when you start your business with Northwest Registered Agent, your entire business Identity in just 10 clicks and 10 minutes. Northwest registered agent provides more privacy, more guidance, and more freedom to run your business from anywhere. If you want to build your business while keeping your personal information secure, Northwest is the partner you need. In just 10 clicks and 10 minutes. They'll form your business, create a custom website and set up your local presence wherever you need it. Don't wait. Protect your privacy, build your brand and set up your business in just 10 clicks in 10 minutes. Visit northwestregisteredagent.com Jill and start building something amazing. Get more with Northwest registered [e-mail] Jill.